Question

Brokers generally agree that bonds are a better investment during times of low interest rates than...

Brokers generally agree that bonds are a better investment during times of low interest rates than during times of high interest rates. A survey of executives during a time of low interest rates showed that 57% of them had some retirement funds invested in bonds. Assume this percentage is constant for bond market investment by executives with retirement funds. Suppose interest rates have risen lately and the proportion of executives with retirement investment money in the bond market may have dropped. To test this idea, a researcher randomly samples 205 executives who have retirement funds. Of these, 95 now have retirement funds invested in bonds. For α = .10, does the test show enough evidence to declare that the proportion of executives with retirement fund investments in the bond market is significantly lower than .57?

Homework Answers

Answer #1

Dear students,

I am waiting for your feedback. I have given my 100% to solve your problems. If you are satisfied by my given answer. Can you please like it by giving thumbs.

ΣP(x)

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
During the class we established the fact that interest rates(discount rates) are negatively affecting the PV....
During the class we established the fact that interest rates(discount rates) are negatively affecting the PV. Afterwards, we concluded that if an investor is intersested in getting a certain yield from an investment, she can calculate the fair price for the bond by discounting the future inflows by that yield. If the market price (which will be a proxy for average expected yield) is lower, then the investor will buy the bond. Imagine a scenario of the following investing decision:...
Which bond should have the highest interest rate? A. Low quality bonds B. Medium quality bonds...
Which bond should have the highest interest rate? A. Low quality bonds B. Medium quality bonds C. High quality bonds Which of the following statements is NOT true? A. Stock owners benefit from stock price increases B. Common stocks are not securities C. Stock prices tend to be very volatile D. Higher stock prices allow companies access to more capital What is the expected impact of a decline in the money supply to the US economy? A. Lower aggregate prices...
1. Which of the following is NOT a risk associated with bonds? a.Default risk. b.Maturity risk....
1. Which of the following is NOT a risk associated with bonds? a.Default risk. b.Maturity risk. c.Liquidity risk. d.Face value risk. e.All of these are bond risks. 2. Which of the following would not be considered a liquid asset? a.A Rembrandt painting b.Cash c.Treasury Bonds d.Stocks Traded on the NYSE e.All of these assets are liquid 3.Which of the following is NOT a shape you could see in a graph of the term structure? a.Upward sloping b.Downward sloping c."M" shaped...
Questions Treasury bills are the safest and the most liquid type of short-term investment. The Treasury...
Questions Treasury bills are the safest and the most liquid type of short-term investment. The Treasury issues 13-week T-bills and 26-week T-bills on a regular basis in denominations of $1,000. Dealers bid on the new issues, but smaller investors just accept the average price. If the price of 13-week T-bills is shown to be $99.2, a) what will be the price be? b) Now calculate the yield. Will the 26 week bills probably have a higher yield or a lower...
QUESTION 11 Mutual funds that carefully select stocks and bonds--relying on smart managers' skills--generally outperform passive,...
QUESTION 11 Mutual funds that carefully select stocks and bonds--relying on smart managers' skills--generally outperform passive, index funds, even though they charge higher fees. True False 5 points    QUESTION 12 If you wanted to buy shares of common stock in IBM, what market would you make a purchase in? New York Stock Exchange S&P 500 Tokyo Stock Exchange Nasdaq 5 points    QUESTION 13 All else equal, an adjustable rate mortgage is riskier to the borrower than a fixed...
2. This question refers to the article: Fed raises interest rates, signals 2 more hikes in...
2. This question refers to the article: Fed raises interest rates, signals 2 more hikes in 2018 Akin Oyedele Mar. 21, 2018, 2:00 PM 16,032     The Federal Reserve announced Wednesday that it raised its benchmark interest rate by 25 basis points, to a range of 1.50% to 1.75%.     Over the next few weeks, this increase will affect credit cards, adjustable-rate mortgages, car loans, and other credit lines that don't have fixed rates.     The Fed still expects to...
1. If you were able to put together a portfolio that completely eliminated all risk, what return would you expect to earn and why?
1. If you were able to put together a portfolio that completely eliminated all risk, what return would you expect to earn and why?This question is a real eye opener, in that with great risk can come great reward. The asset classes I can think of to present to me a zero-risk situation in the portfolio would be the following: Savings account, CD certificate, bonds, treasuries, and ponds. I expect to get minimal and low return on investment. Obviously the...
Multiple Choice 11. Prepayment risk is: A. the risk you will not receive the cash flows...
Multiple Choice 11. Prepayment risk is: A. the risk you will not receive the cash flows on a mortgage-backed security B. the risk that you will receive the cash flows sooner than expected and be forced to invest at a lower rate. C. the risk that you will receive the cash flows later than expected and not be able to invest at current, higher rates. 12. Based on the video Inside the Meltdown, it appeared that the main reason Lehman...
Topic: Open Market Supply SHANGHAI -- Money markets are often described as the financial system's plumbing....
Topic: Open Market Supply SHANGHAI -- Money markets are often described as the financial system's plumbing. When they work, which is most of the time, hardly anyone notices, but when they get blocked up, it creates quite a stink. That is why China's money market -- in which banks and other financial institutions borrowed some $6.4 trillion from each other last month alone to fund their daily needs -- is becoming one of the world's most important markets to watch....
Read the RBA’s May 2020 interest rate decision: Explain: Your understanding of why the RBA made...
Read the RBA’s May 2020 interest rate decision: Explain: Your understanding of why the RBA made the decision that they did, with respect to the content of the interest rate decision statement itself and also the RBA’s policy objectives What the RBA’s monetary policy decision means in terms of practical implementation The expected transmission of the monetary policy decision to economic outcomes Statement by Philip Lowe, Governor: Monetary Policy Decision Number2020-13 Date5 May 2020 At its meeting today, the Board...